XpressWest Has $1.5 Billion In Private Investors – And A Strong Argument for Victorville

Sep 3rd, 2012 | Posted by

The California high speed rail project closest to completion isn’t the San Francisco to Los Angeles route being built by the California High Speed Rail Authority. It’s XpressWest, formerly known as DesertXpress, which would connect Las Vegas to Los Angeles via Victorville and Palmdale. The project has sometimes appeared to be more promise than reality, but in 2012 it has taken some big leaps toward getting construction under way. And as a new interview with a key figure shows, the project already has $1.5 billion in private funding commitments. It also has research showing that the initial terminus of Victorville makes a lot of sense, challenging the critics who have often blasted that location.

Epic traffic jam on Interstate 15 near CA-NV border

Tony Marnell is probably best known as the builder of the Bellagio, the Mirage and Wynn Las Vegas or the owner and operater of the Rio before it was sold to what is now Caesars Entertainment.

But he’s also a key figure in the development of XpressWest, the high-speed rail system planned between Las Vegas and Southern California. Marnell is chairman and CEO of the Marnell Companies, a partner in the project….

[Quoting Marnell here:] We’re putting up $1.5 billion. I can’t disclose who they are right now. We’re under confidentiality agreements with the U.S. government. They know all of this information, and we have agreed that we are not going to go through the loan process in the public.

If it’s decided on, it will become public information. If we’re denied the loan, as a private company, we don’t think we should have to disclose it.

It’s not a public opinion poll. It’s a real project and has a real purpose for a real need. It’s being presented as a business proposition under existing laws and statutes. There has not been one penny, and there is not one penny intended, of taxpayer or grant money in the application at this point in time. It’s private capital and infrastructure financing instruments.

One can speculate as to who these other investors are, but if you guessed “other Vegas casinos” you would probably not be wrong. They can read a gas price chart as well as anyone and know that as gas prices continue to rise, driving to Vegas isn’t going to be as affordable an option for Southern Californians as it once was. They can also read a traffic report, and know that Interstate 15 routinely backs up on weekends, further deterring drivers.

So encouraging travelers to get on a train makes a lot of sense. But where would Southern Californians board it? The current plan is that a first phase would be built to Victorville, with an extension across the desert to Palmdale and connecting to LA soon to follow. The interview with Marnell has some good discussion of the LA connection, but I thought his justification of Victorville was worth reading:

Q: Why Victorville?

A: I may have had a bit of an advantage because for 10 years I was the CEO of a public company that owned the Rio. I could look at the slot cards of my customers that list their ZIP codes. That was an ingenious thing.

Steve Wynn (chairman of Wynn Resorts), Jim Murren (CEO of MGM Resorts International) and Sheldon Adelson (chairman of Las Vegas Sands and owner of the Venetian) were doing that – looking at where their driving customers were coming from. And they’re not coming from Beverly Hills, Santa Monica, Laguna Beach or downtown Los Angeles. They’re coming from the Inland Empire.

The Inland Empire is only 40 minutes away from Victorville. That’s why it makes sense.

That’s a really interesting comment, and not just because I’m a bit surprised he said that publicly. It shows that the Vegas casinos see the Inland Empire as a key source of visitors, and they’ve got the evidence to back it up. These casino owners are not idiots, as any of you who have left your money with them can attest. If they say that building a bullet train with a terminus at Victorville is good for their bottom line, and if they’re willing to show some evidence for it, I don’t see the point in trying to argue with them.

The other reason this is interesting is it suggests another reason for building XpressWest – they might be trying to attract visitors from cities like Beverly Hills, Santa Monica, and downtown LA. It’s a pain in the ass to drive to Vegas from the coastal parts of SoCal on a Friday or Saturday. But taking Metro Rail to Union Station and boarding a bullet train for Vegas is a lot easier – certainly more relaxing. One could start drinking on the train and by the time you get to Vegas be in a perfect, uh, mood to hit the casino floor or a club.

The interview is full of interesting details, including about train speeds, express service, and comparisons to other HSR systems. But the big question everyone asks is how this will be paid for, because the $1.5 billion private investment won’t be enough. Marnell has more information about the federal loan they’re seeking:

We’re in continual Q&A regarding the loan application. Like any large loan, there are tedious, extensive amounts of information that the lender wants to have, which we certainly appreciate. We’ve been in that mode vigorously for the last 90 days. We’re at the point of making sure we have the right backup, the right information….

this loan we’re applying for was put into place by Congress in the last year of Bill Clinton’s administration. This is not some new thing. It’s all Republicans and Democrats.

If we want private industry to get involved in developing our rail system and wean ourselves off Amtrak tax support, why not put an instrument in here that private industry can work with? The single biggest question I get is, if it’s such a good idea, why don’t you go to the bank and get the money? The last banker that gave me a 30-year loan was when I was 23 years old. There are no 30-year loans for these kinds of projects. The only way people do big infrastructure projects is through the government. Commercial banks won’t do it.

Next, this is not a Solyndra situation. The project itself has been administered by the Federal Railroad Administration under two different presidents so far. When we received our environmental impact statement more than a year ago, we had to state our probable sources of funding. We identified the loan program in the document as a probable partial funding source. We applied for the loan 19 months ago, so this is not something where somebody called up and said, “Give this cowboy in Las Vegas a loan.” It has had true due diligence, and it’s going on right now on this loan. I don’t think people understand that.

He’s got a strong point here about the need for government support to build infrastructure, and he’s absolutely right that it’s absurd to expect the private sector do this all on their own. Commercial banks just don’t do loans for these kinds of big, costly infrastructure projects. As the Taiwan HSR experience showed, you can’t repay the loans quickly enough to satisfy the private lenders. So it has to be government that helps support construction.

The whole thing is worth reading, and makes it very clear that XpressWest is a strong, credible, serious HSR project that is on the verge of construction. It’s a key piece of high speed rail in California, and I for one am looking forward to riding it when it opens.

  1. D. P. Lubic
    Sep 3rd, 2012 at 22:06

    Some interesting perspectives there:

    Both systems have to go through a “due diligence” procedure; it’s just that the procedures are different (one is “market driven,” the other–public service or utitlity?)

    “The California high-speed rail initiative went through the same process we went through in a different way. Our project, we think, is market-driven. We think there is a viable, real market for travel between Southern California and Las Vegas. We see that demand every day on Interstate 15 and at our airport.

    “We also think Las Vegas becomes the key to the Southwest and to the mountain states. Just look at the geography. Look what infrastructure is in place. Look where the population is going. We think Las Vegas finds itself in a very key place.

    “California had to go through its due diligence and understand how it was going to move a population soon to be 50 million people in a state the size of the country of Italy. How were they going to move that population around? Were they going to be able to keep building just highways and airports? We don’t think so. We’ve never seen any country be able to do it without a third mode of transportation, i.e. rail. Sooner or later, the system shuts down. The California High Speed Rail Authority has been doing these studies now for six years and last year, they finally came to several alternatives that they put on the table as possible solutions for their long-term planning.”

    On Palmdale, airports, and high-speed freight service:

    “When that issue came to light, Palmdale was a key place for one simple reason – it was the only logical place to continue to move Southern Californians through the San Fernando Valley north and east through the High Desert. It’s also the logical route to the Rocky Mountains.

    “With high-speed rail, you don’t have to think about boring long tunnels. It’s much easier to travel on the surface at a low grade and take the extra 10 minutes when you’re traveling 220 mph than to bore long, expensive tunnels through granite mountains. Palmdale is the next location for an airport in Southern California. The long-term plan will be to fly freight into Palmdale and leave Los Angeles International Airport for passengers. Move all freight coming in off boats in Southern California and transport it by rail to relieve the inner freeway systems and then distribute to the western United States.”

    On to Denver!

    “As we speak, there are existing and planned high-speed corridors in America. They are looking at fulfilling an existing demand or preparing for what I call the ‘China effect.’

    “China looked at its country and said, ‘If we connect City A with City B, then one plus one becomes three.’ One city might provide manufacturing, one city might supply technology, and they needed to start communicating.

    “We don’t have good connections with Phoenix right now. But if you could get to Phoenix in an hour and 20 minutes, it would be a nice place to go see a ball game or golf or go on vacation. Las Vegas would also be a lot more attractive for people to come for a day or two. It would be a simple trip to go from downtown Phoenix to Las Vegas in an hour and 30 minutes.”

    On speed, grades, Cajon, and CAHSR:

    “We’re going to go 190 mph.

    “Let’s use the analogy that if you’re on a runway and the plane starts to fly when it reaches 150 mph. It’s the same thing with high-speed rail. We can go from Las Vegas to Victorville in 86 minutes. If I want to take you at 200 mph, it’s seven minutes quicker. But I’m going to use twice the electricity, and I’m going to spend twice the operating costs, which means I’m going to have to charge you twice the amount of money to save you six or seven minutes.

    “It’s a math problem. The trains that we are putting on the tracks will reach higher speeds in sections. When we talk about speeds, were talking about the fastest it will go on its journey. The train will not go 220 mph from Point A to Point B. We will be bringing you the latest technology. Our trains will be capable of going 220 mph. We’re engineering interoperability with California, which will go 220 mph. But it’s also a maintenance and energy equation.

    “One other thing: The idea that a high-speed train can’t go over Cajon Pass is a total falsehood. It’s just going to go over slower. You have weight and you have gravity and at a certain point, you’re going to slow down to get up that grade. And you’re going to have to slow down going down the grade because it isn’t a roller coaster.

    “Another thing to think about is people become uncomfortable with anything more than a 5 percent grade. It’s like the feeling you get when you take off in an airplane or land in an airplane. It’s not as comfortable as when you’ve leveled off. And you’re relative to your surroundings. You get more and more uncomfortable if you see things going by quickly.”

    Derek Reply:

    One nice thing about trains is that you can double the number of passengers without doubling the amount of energy lost by air resistance.

    Richard Mlynarik Reply:

    If only “energy lost by air resistance” were more than a single digit percentage of the cost of operations, maintenance, and depreciating capital (of a ton of excess expensive equipment sitting around to make perhaps two round trips a week) this might be vaguely relevant.

    But it isn’t.

  2. Donk
    Sep 3rd, 2012 at 22:23

    While there are several advantages to a train over driving, one of two conditions must also be met: (1) it is faster; or (2) it is cheaper.

    1. This is basically a wash on all days except Fri afternoons north and Sundays south. It takes 3 hrs from Victorville to Vegas with no traffic. It will take 2:20 on XpressWest, but you have to factor in the time to park your car and wait for the train in Victorville and to get connecting transit in Vegas. So I don’t see the “faster” argument holding on any day except for Friday and Sunday.

    2. Most people carpool to Vegas. Tickets better be cheaper than the round trip cost of gas divided by two people. Otherwise you are not saving any money. If there are three people, they will probably drive.

    MarkB Reply:

    There are other considerations than time or speed. Today on the Surfliner as I was traveling to visit family, I saw people people using computers and iPads, reading, napping, eating, drinking (including alcohol), socializing, staring at the scenery, going to the bathroom and more. None of that would be easily possible while driving. What I did not see was anyone getting frustrated with traffic. I didn’t see any distracted driving or drunk driving. I didn’t see anyone texting while driving.

    I could have driven to the OC or used my motorcycle, but why? Others, apparently, made similar decisions.

    Your analysis is too limited and too clinical, too “homo economics.”

    MarkB Reply:

    Should have added: it would have been significantly cheaper for me to drive, but that was only one consideration among many.

    Donk Reply:

    That’s exactly why I started my post off with “While there are several advantages to a train over driving…”

    Miles Bader Reply:

    You also made the claim that only “faster” or “cheaper” will attract travelers.

    Mark’s point is that this isn’t true: as long as the train is a sufficiently more pleasant/convenient experience, then it just has to be “good enough” on the fast/cheap axes.

    Andy M Reply:

    It’s a game of sums.

    Just the fact that there is a train will attract a base level of ridership. Most Amtrak long-distance routes cannot compete on speed but they get riders “just because” there is a train.

    You can then add to that ridership by adding pieces to the jigsaw. Each one of these adds to ridership, and if you add several, there is a multiplicative effect. These addable bits include (but are not limited to), not arranged in any particular order

    – attractive on train amentites such as food and drinks service, alcoholic beverages
    – business oriented amenities such as WiFi, laptop power supplies, phone coverage
    – tourist oriented amenities such as interesting views, large windows etc
    – network effect achieved by connections with other trains, buses, airports etc.
    – speed
    – price
    – overall perception of service quality that can be helped by punctuality, well designed and clean trains, professional staff etc.
    – easy to find timetables and fares information, easy to book, easy to ride

    flowmotion Reply:

    Once the route reaches the LA area, more people will proactively decide to take the train for the amenities. But I think Victorville will act as a distant decision point. “We’ve already driven this far and traffic doesn’t look too bad…”

    And Donk is correct in that transfer costs will be an important factor, probably moreso on the Vegas end.

    adirondacker12800 Reply:

    a quarter of the people who visit Las Vegas come from California. The other three quarters come from more distant points and tend to arrive by airplane. They don’t bring their cars with them and manage to get around without them.

    MarkB Reply:

    The guy said the company’s first target isn’t LA/OC, it’s the IE. The IE is close enough to Victorville to not have the “We’ve driven this far…” argument.

    jimsf Reply:

    If the station and onboard experience is made worthwhile enough, then they will choose the xpress west. And it will only take a few weekends of hundreds of thousands of cars sitting in bumber traffic as the trains swoosh by at a high speed, to make the people in cars wonder… hmm maybe we should try that next time.
    The other variable is advertising. Advertising can make us do just about anything. ( how much crap does everyone have in their houses that they don’t really need) so if they use good advertising they will get ridership and if they offer a unique experience, they will keep and build ridership. its pretty simple.

    Richard Mlynarik Reply:

    “Proactive” train riders. So much better than the reactive or reflexive classes of passenger.

    Chock full of gumption. And initiative. And risk-taking. And entrepreneurship. And probiotics.

    James M. in Irvine Reply:

    So Express West sponsers a billboard that looks like the highway information sign: “45 minutes to Barstow, 240 minutes to Vegas. Or take the train and it is 90 minutes, take the next exit for Express West!” Just because traffic looks good now, doesn’t mean it is good when you finally get to that area.

    Posted from Vic20

    MarkB Reply:

    You said that in addition, “one of two conditions must also be met,” those two being time or speed. Must. Meaning “cannot be without.” The train frequently has neither, yet people take it anyway. In great number.

    MarkB Reply:

    damn the lack of edit: time or cost. Learn to proofread better, Mark!

    Derek Reply:

    No, XpressWest will take only 84 minutes from Victorville to Las Vegas. And why would it take longer to park your car in Victorville than in Las Vegas?

    Donk Reply:

    Because you have to park your car, walk to the station platform, buy a ticket, and wait for the train. If you are driving thru traffic in LA to get to Victorville, there is no way you will be able to time your arrival to meet an outgoing train. And the assertion I have previously heard that there will be 20 min headways is nonsense. Headways will be 1 hr at best. So assume you have to wait 30 min + the time to park and buy a ticket.

    My math was wrong though on on the travel time. I guess it is 1:20, not 2:20. But then I also did not factor in that you will no longer have to stop at In-N-Out in Barstow for 30 min if you are on the train. So lets estimate that it is 2 hrs from VV by train and 3:30 by car. If they do in fact get the train travel time down to 84 min, then it will be significantly faster, even on weekdays.

    Alon Levy Reply:

    The EIR says a diesel option would be 1:56, a 125 mph electric option would be 1:40, and a 150 mph electric option would be 1:24.

    And in today’s age of e-ticketing, you can buy a ticket at home, or even from your car if you have another passenger in your car.

    BruceMcF Reply:

    And the interview says its 220mph capable trains, running up to 190mph, and making the trip in 1:26.

    Derek Reply:

    And XpressWest’s Victorville station will offer baggage services and hotel check-in, so that will save you some time when you arrive in Las Vegas.

    jimsf Reply:

    They can offer a lot more than that if they want. no doubt there will be a hotel or two onsite or nearby eventually, they can have full retail offerings. Pick up that new swimsuit or last minute tourist trinket prior to boarding. Shoe shine, wells fargo branch, what have you. You can have all the stuff one finds at freeway service exit gas, convenience stores etc, and all the things you find at any nice airport terminal ( the airport in OC actually looks like a mall) And you can gloss and glam the whole thing over with a vegas treatment. And again, they can raise revenue in many ways from offering high end luxuries for the well to do,, the hollywood crowd, the corporate crowd, as well as a budget experience that still makes the trip fun for a family.

    Andy M Reply:

    Better than hotel check-in in Victorville would be a check-in while the train is moving. Imagine the frustration of seeing your train move away because you’re trying to explain your dietary requirements to the receptionist. Receptionists could move through the train while it’s on the move. With modern technology there is no need for a check-in computer or key card writer to be a fixed device. It could easily be a handheld device.

    Nathanael Reply:

    “Because you have to park your car, walk to the station platform, buy a ticket, and wait for the train. If you are driving thru traffic in LA to get to Victorville, there is no way you will be able to time your arrival to meet an outgoing train.”

    Um, you have to drive through traffic in LA if you’re driving all the way to Vegas too. And you have to leave extra time at the Vegas end in case traffic delays you. Whereas with the train, you don’t have to do that.

    So the “extra time to allow for traffic before catching the train” time at Victorville is equivalent to the “extra time to allow for traffic” when driving. It’s equivalent.

    Neil Shea Reply:

    Yeah, imagine if you flew to Vegas. You’d be at risk of unpredictable traffic in trying to make your flight — wow, it’s way too hard, I can’t handle things!

    Wdobner Reply:

    Because you have to park your car, walk to the station platform, buy a ticket, and wait for the train.

    Why can’t XpressWest provide valet parking in Victorville? I doubt their profit margin is going to be so slim that a few people parking cars will drive the company into the red. In fact having a crews doing the parking could allow them to place the cars in the lots with greater density, thereby saving space and perhaps reducing cost.

    Nathanael Reply:

    (1) You just concluded the train would be faster.
    (2) It’s not clear whether the train will be cheaper; depends on the future cost of gas, doesn’t it?

    I mean, I’m not fond of this line because *I don’t want to encourage people to go to Vegas to gamble*. But from the point of view of the casinos, it makes perfect sense.

    There is another aspect when you’re trying to attract people to throw their money away: You can get the punters drinking, and forgetting their inhibitions, faster.

    Would you be surprised if the train had slot machines onboard, which activate the moment you enter Nevada? Because I wouldn’t.

  3. Joey
    Sep 3rd, 2012 at 22:49

    Are they still planning 90 mph curves in the middle of the desert?

    Peter Reply:

    Last I saw in the EIS, yes, they are. I would not be surprised if they straighten those designs slightly before construction. Don’t forget the 4.5% inclines, either, though. They have some impressive terrain to cross.

    Alon Levy Reply:

    At least they’re planning on such a low top speed that at least in principle they could run tilting trains. (No, it’s not normally rational to run tilting trains on entirely greenfield tracks. But when life gives you lemons, make lemonade in your Pendolino seat.)

    BruceMcF Reply:

    Is 190mph such a low top speed?

    Alon Levy Reply:

    No, 190 mph is high. It’s just that the EIS is for 125-150 mph. I’m not sure if XpressWest has FRA approval for higher speeds.

  4. KenB
    Sep 3rd, 2012 at 22:58

    Victorville to Las Vegas will take 90 min., not 2:20.

    KenB Reply:

    This was supposed to be under reply for Donk comment

  5. Alan F
    Sep 4th, 2012 at 08:19

    My take on the interview and other recent news stores on the XpressWest plans is that XpressWest expects the FRA RRIF loan to be announced soon. XpressWest is getting their side of the story out into the press ahead of the announcement.

    Good points in the interview about the trade-off of power consumption and operating costs for higher speeds. Since the route from Victorville to Vegas does not have many long straight segments, 220 mph max speeds will provide marginal improvements. I also take the 190 mph as 300 km/hr = 186 mph rounded off for public consumption.

    Anyone want to lay odds that the announcement of the RRIF loan will be made this week while the Democratic Convention is underway and Congress is in recess?

    Robert Cruickshank Reply:

    My view has always been that the loan won’t be announced until after the November 2012 election, but I suppose it’s possible it could come sooner.

    Alan F Reply:

    Look at the presidential election politics at the state level. California is a safe blue state. Nevada, however, is a toss-up state. How would the announcement of the loan grant play in NV? The project will be headquartered and run out of Las Vegas. That means jobs for engineers, surveyors, contractors, construction workers, accountants with a large pool of unemployed and underemployed construction industry workers to draw on in Vegas.

    If the RRIF loan grant is announced in the next few weeks, the Obama Administration and US DOT spin will be jobs, jobs, jobs. XpressWest will likely be asked to play up their hiring plans at any formal announcement event in Vegas.

    The announcement of a loan for a project in NV is not going to affect the election in OH, PA or VA. So why wait until after the election if the Administration and Senator Reid thinks it would help in NV? If they think it won’t help in NV, then the loan approval could wait until November.

    VBobier Reply:

    Well I hope the do get the loan, it would be something to see no matter what.

    VBobier Reply:

    “the” should be “they”…

    James B Reply:

    I’m slightly concerned that it will be spun as waste waste waste. While LV is certainly not ‘nowhere’, Victorville makes this an easy project to be ripped by a) novice journalists b) biased folks and c) the Repubs, of course.

    But seriously now, is anyone else also slightly bothered by this project and the fact that it doesn’t actually go to downtown LA? I’ve always seen that as the point of HSR. Sure, Inland Emp folks can drive to Victorville (though for me, driving 40 minutes, switching on to a train possible with loads of baggage and not having a car in LV doesn’t seem all too practical), but what about LA folks? Robert said that you could take Metro and then hop on HSR–but it’s not that easy. It would be more like get to Metro, hop on Metro, transfer to CAHSR, then transfer the XpressWest. All those transfers–if with baggage– make this seem very unlikely to be a booming success. Is anyone else bothered by this fact? I really thin ultimately, XpressWest should go straight to LA (even if it’s in Little Tokyo or some further east area DIRECTLY connected by Metrorail).

    Peter Baldo Reply:

    Please explain, again, why California (with its stellar credit rating) is selling bonds on the private market, rather than going after these government loans?

    VBobier Reply:

    Possibly cause of Prop1a or an AB that I forget the number to, maybe…

    Andy M Reply:

    Or maybe they’re waiting until after the election as dumbed down media could easily construe the loan as a subsidy for a supposed “train to nowhere”.

    Nathanael Reply:

    Or maybe they’re waiting until after the election to turn the loan DOWN, so as not to alienate Nevadans. We could speculate about this until December!

    Alon Levy Reply:

    I still maintain they should delay the decision until after the election so that we can know how much extra federal money is realistically available to California. Best possible case for XpressWest is if the feds chip in enough money to build an IOS through Palmdale.

  6. Jo
    Sep 4th, 2012 at 08:52

    Excellent article. Mr. Marnell knows his stuff. It is good to know that good old american ingenuity and knowhow is alive and well in the XpressWest project. If only our politicians (right and left) had Mr. Marnell’s smarts, integrity, and honesty.

    Peter Baldo Reply:

    I agree. He’s not building a railroad. Instead, he’s making Las Vegas an even bigger, a more gaudy, and a more all-encompassing experience than it already is. He’s a marketing genius.

    Jo Reply:

    Las Vegas is indeed gaudy. But it is not the only gaudy place in the country, there are lots of others. Myself, I consider any city that is designed and built for the automobile and not people – gaudy.

  7. Paul Druce
    Sep 4th, 2012 at 12:52

    Couple of problems, all tied up with the driving issue. According to Vegas’ stats, 91% of SoCal visitors came by personally owned vehicle, and about another 3% by bus. Unless the Inland Empire is significantly disproportionately more likely to make trips to Vegas, the notion that their driving customers are coming from the Inland Empire rather than the rest of SoCal is a crock.

    The other problem ties into that. Their business plan relies on gaining 40% of the SoCal-Las Vegas marketshare with an expensive train trip starting in the boondocks when comparably priced airfare located significantly closer to the majority of the populace only manage 6%. That’s rather questionable.

    jimsf Reply:

    What it depends up on is what kind of service they offer. If they offer something that people enjoy, word of mouth will get out and it will be a hit. Look how many people pay to get into disneyland everyday tickets a ridiculous admission price in my opinion…. yet disneyland gets “In 2011, 16.14 million people visited the park, making it the second most visited park in the world that calendar year.[6]”

    SO People will pay money for a variety of experiences. And people will pay money to get out of traffic. S o if you offer speed, comfort, and on board perks as well as a good experience at each end, people will flock to it. And I trust the vegas casino moguls to know how maximize that experience. ( and Im not a fan of vegas at all)

    Theres really no limit to what they could offer.
    Drinking yep
    sports themes yep
    adult cars with strippers. yep
    on board shopping. and at stations yep
    movies, yep
    cars for kids yep,
    gaming… not sure I guess if its a type of gaming that is allowed in california – maybe off track betting or other such stuff. But im sure they will work all that out.

    Or all they may need to offer a really plush interior with at seat food and beverage service.

    not to mention making money by chartering cars or whole trainsets to corporate accounts etc.

    If the vags folks can trick 36 million people from around the world, a year into making a trip into a god awful ugly miserable hell hole in the middle of nowhere, and leaving who knows how many millions or billions of hard earned dollars behind each year. Im pretty sure they know how to trick people into getting on a train too. NO doubt about that.

    Paul Druce Reply:

    Disneyland is an attraction, XpressWest is a means of transportation. They are not in any way comparable.

    And the idea of having both kids cars and stripper cars just makes my head hurt.

    jimsf Reply:

    its not just a form of transportation… CA is building transportation. Vegas is building and extension of the vegas experience that happens to happen on board a train. It makes the enjoyable part of your vacation start start sooner and last longer. And why can’t there be a kids car with games/arcade/movies and a stipper car with plush velvet booths and strippers.You just need a car to occupy the wives to keep them happy too and all is well!

    adirondacker12800 Reply:

    a Chippendales car for the wives…

    jimsf Reply:

    you just don’t have any creative vision.

    Nathanael Reply:

    Paul Druce, you’re misreading. The guy from Vegas is saying that, *right now*, most of the people coming from California to Vegas *are from the Inland Empire*. Therefore he is targeting them to switch from driving to riding the train. He doesn’t care about Santa Monica, because Vegas gamblers aren’t living in Santa Monica in meaningful numbers.

    Nathanael Reply:

    “Unless the Inland Empire is significantly disproportionately more likely to make trips to Vegas, ”

    This is *precisely* what Mr. Marnell claimed. I don’t know whether he’s right, but he claimed this outright, if you read what he said.

    Paul Druce Reply:

    If he honestly believes that the four million residents of the IE make 10 million trips per year to Vegas, he is an idiot.

    D. P. Lubic Reply:

    Mr. Marnell says this comes out of tracking ZIP codes from “slot cards,” whatever those are. It doesn’t sound like this is something he made up out of the blue.

    Even at that, that’s not a really high number. That works out to less than 3 trips per year per Inland Valley resident, based on the numbers you have. The question now becomes, how many of those Inland Valley residents are gamblers? How many of them are “serious” gamblers, as in semi-professional, or more skilled than average? How many of them might even be “problem” or “addicted” gamblers? All would be customers of Las Vegas, and thus potential customers of this rail service.

    Travis Mason-Bushman Reply:

    All the casinos have “club cards” just like the supermarkets, hotel chains, airlines, etc. that they use to collect data about their customers. Not everyone has them, but basically any serious Vegas visitor/gambler gets them – that’s how bets are tracked and “comps” are doled out.

    adirondacker12800 Reply:

    Playing the slots takes no skill, you have to be able to press a button.
    Slot cards are casino Plaid Stamps. From Wikipedia:
    Slot clubs
    Many American casinos offer free memberships in “slot clubs,” which return a fraction of the amount of money that is bet in the form of comps (complimentary food, drinks, hotel rooms, or merchandise), or sometimes as cash or a promise to pay cash at a later date. These clubs require that players use cards that are inserted into the slot machines, to allow the casinos to track the players’ “action” (how much each player bets and for how long), which is often used to establish levels of play that may make players eligible for additional comps.

    James M. in Irvine Reply:

    While there are only 4 million in the Inland Empire and not everyone goes to Vegas, there are those that go monthly or even weekly. I do not find the 10 million annually to be out there.


    Paul Druce Reply:

    On average, SoCal visitors go about twice per year. This would require essentially the entire IE to go to Vegas and be nearly the only ones who do. Higher frequencies with fewer people would significantly distort those figures.

    BruceMcF Reply:

    On average over all SoCal residents, or on average over all SoCal visitors?

    James M. in Irvine Reply:

    I was refering to residents.


    Paul Druce Reply:

    On average over all SoCal visitors.

  8. KenB
    Sep 4th, 2012 at 13:05

    Mr. Marnell spoke of high speed freight between the Port of LA and Palmdale. I never heard of this before. Does anyone know where this comes from? Would they use the same line?
    Is either the UP or BNSF involved in this?

    Paul Druce Reply:

    It’s an opium dream.

    synonymouse Reply:

    What is Adelson’s position on Deserted Xprss?

    Nathanael Reply:

    It’s not “high speed”. By “high speed freight” they mean “intermodal speed”. And by “Palmdale” they mean “anything north of the Cajon Pass”. Chalk it up to “talking to the layman”.

  9. D. P. Lubic
    Sep 4th, 2012 at 16:53

    Off topic, but yet another example of why we need grade separation, this time in Colorado:


    Like the last incident I had here, this involves an older driver driving right in front of the train. Thankfully no fatalities, but one must wonder how it is not possible to see something as big and noisy as a train, especially in the lower speed ranges.

  10. Interurbans
    Sep 5th, 2012 at 13:13

    Let the people who will use it and profit from it finance it. This only benefits the Casinos, entertainment venues and the people who visit them, not the general tax payers. Let them put up their property’s as collateral since they re so sure that it will pay its own way. There is no way the needed California HSR needs to take the long deter to Palmdale. When the HSR is built the Metrolink line can be speeded up and electrified to speed the jurney from LA over Metrolink to Palmdale and then over the XpressWest to Victorville and Las Vegas. This needs to be paid for with privet money without any government guarantee. Then we can see just who will ride. People from Orange County and the Inland Empire can still catch the train at Victorville.

    adirondacker12800 Reply:

    Casinos pay taxes. The people who work in the casinos pay taxes. The people who visit the casinos pay taxes.

    BruceMcF Reply:

    Note that “taxpayer finance” is a confusing way to describe the process. If the taxpayer covered the interest charge, that would clearly be taxpayer finance. While this is publicly financed, privately funded, the effective contribution of the taxpayers in terms of a fair market value of default risk is substantially smaller than the private funds placed at risk.

    Also note that your fundamental premise is false: that fact that it does benefit Casinos, entertainment venues and people who visit them does not mean it only benefits those parties. And the funding, both the funding of the loans and the $1.5b in equity funding, comes from the riders and, it seems, from precisely those interests that you specify.

    Given that the effective cost to the taxpayers of the publicly finance, privately funded system is quite low, it only takes a small share of the transport services benefiting people other than casinos and people who visit them in order to justify the cost.

    Indeed, this seems far preferable to the more common yellow bellied surplus sucker model of “public private partnership”, in which private parties provide finance, at higher cost, and the public authority guarantees that there will be a revenue to find the borrowing, plus a margin for profit to the private “partner”.

  11. trentbridge
    Sep 5th, 2012 at 14:24

    “The California high speed rail project closest to completion isn’t the San Francisco to Los Angeles route being built by the California High Speed Rail Authority. ”

    Completion? Neither project has held a traditional “ground-breaking” event yet! My bet would be that CAHSR will hold a ground-breaking” ceremony first. Probably first quarter of ’13 with President Obama attending!

    I’m old enough to have heard the “we have private investors lined up to back this project” many times – they won’t ever, ever put in the first dollar. They want the public sector to contribute their billions and then they want one hundred percent ownership for putting in the last dollars needed. Show me any NFL stadium, any MLB baseball park that was build in the last thirty years that didn’t involve a smorgasbord of tax holidays, tax incentives/rebates and public sector infrastruture support before the first clod of dirt was moved!

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